Year-End Sales Battle Warms Up
Prior to the year-end sales battle, our magazine carried out a survey of the main products that would be the focus of attention in the campaign influential 25 stores in Japan. The top-six ranking was as follows: (1) DVD (digital versatile disc) recorders; (2) PDP (plasma display panel) televisions; (3) LCD (liquid crystal display) televisions; (4) home theater systems; (5) audiovisual amplifiers. (6) digital cameras;
Regarding the first-placed DVD recorders, the sales forecast is for 500,000 units, up 380% over the previous year, but this forecast should be easily cleared. There is a clear shift from video tape recorders to DVDs, and the speed of this shift is three times as fast as that for VTRs. Moreover, the buyers of DVDs are people in their thirties, twenties, and then forties - in other words, the personal computer generation. It will be the stores that can definitely pinpoint these people who will taste the sweet wine of success. The real competition will come from now on. In particular, the battle is going to be even more fierce, because the likes of Sony, Mitsubishi, and Hitachi will be joining the fray early next year. The fight over a bigger share of the pie should turn out to be really frantic.
DVD recorders are certain sellers. And if the hardware diffuses rapidly, naturally the media is going to create a huge market in real time. DVD media makers are being forced to compete with rivals in such places as Taiwan and China from the start, and they are struggling in a whirlpool of price competition. Perhaps they should think about building a comprehensive strategy. An overwhelmingly high ratio of users wants high-quality recording. Are they going to be satisfied with \100 and \200 products[LEX1]? Makers probably think that they can move in parallel with the PC world, but that is a big mistake.
Japanese makers should adopt discriminating strategies that only they can follow. As we approach the age of ground-wave digital television, the software environment is going to move up into the high-quality zone. In the medium-term perspective, the media environment is going to change. Unless makers think seriously about discriminating strategies based on quality and use, they are going to be left with an unprofitable business. It is certain that recording demand is going to grow even more than with VTRs, so I hope that they do some thinking here.
The products ranked second and lower were as forecast, too. If stores firmly adopt a strategy of "designing the customer's home theater life over a decade," under the concept of "building a home theater environment based on the happy family," then home-theater products, with their upgraded materials, will be a hit. Many stores are going to flourish in the year-end sales battle, but the stores that are still successful in their communities in three years time will be those that have a solid strategy. With Sony's appearance on the scene, the battle over PDP and LCD televisions is going to be really frenzied. It will be interesting to see what impact Sony's overwhelming strength as a reliable brand will have on the campaign.
Whatever the outcome, it will be a sales battle in which growth products shine and brand names sparkle on the shelves. We certainly are entering an age of full-fledged competition.